Server platforms Toolkit

SGI details recovery plan

Stephen Shankland CNET News

Published: 06 Mar 2006 09:55 GMT

SGI announced on Friday it will lay off 12 percent of its work force, about 250 people, and named new executives as part of a plan to recover from its financial problems.

In addition, the company will "aggressively pursue new markets" in corporate computing, bringing its historical focus on high-performance technical computing to more mainstream customers. The moves were announced a month after the arrival of SGI's new chief executive, Dennis McKenna.

"What we are adding to our sales targets are segments of the enterprise that have high-performance computing needs, such as telcos or very-large-database users," spokeswoman Caroline Japic said.

The moves will mean a $20m (£10m) restructuring charge taken over several quarters but are expected to cut $150m in expenses by the end of 2006. SGI stock rose 13 percent to 45 cents in midday trading on Friday.

SGI's chief financial officer, Jeff Zellmer, and chief operating officer, Warren Pratt, resigned from SGI "to pursue personal interests", the company also said. Kathy Lanterman, who has been SGI's corporate controller, will replace Zellmer as CFO.

In addition, the company's board continues to explore strategic and financial options, the company said.